Trading on I&E FX window drops by 33.3% in one week

Investors’ trading on Investors & Exporters (I & E) foreign exchange dropped by 33.3 per cent in one week to total $874.61 million transactions despite stability in the market.

Last week, a total of $1.3 billion was traded on the specialized window for investors and exporters as growing demand for foreign exchange was on high.

Last week transaction breakdown by Nigerian NewsDirect revealed that in the first trading day, February 5, 2018, a total of $167.25 million was traded while on February 6, 2018, a total of $212.31 was transacted on the specialized window for investors and exporters.

Between February 7 and 8, $166.58 and $170.46 were traded and it closed on February 9 at $158.01 was traded I & E window.

The naira remained flat against the dollar at N363 in the parallel market (as it had in all sessions of the week), while it strengthened in the I&E foreign exchange window by 0.04 per cent to N360.27.

Meanwhile, the naira exchanged at N361/$1 in the BDC segment of the market on Friday.

However, The Central Bank of Nigeria (CBN) had intervened in the Retail Secondary Market Intervention Sales (SMIS) to the tune of $325.64 million.

Figures obtained from the Bank last Friday, indicated that the amount released was for requests in the agriculture, airlines, petroleum products and raw materials and machinery sectors.

The figures were confirmed by the bank’s Acting Director Corporate Communications, Mr. Isaac Okoroafor, who noted that the continued interventions were in line with the assurances made by the Governor, Godwin Emefiele, to sustain market liquidity in order to boost production and trade.

According to him, the feedback from the wholesale and retail segments of the Nigerian foreign exchange markets showed that customers were satisfied with their level of access to foreign exchange.

He said the degree of optimism displayed by all players underscored the fact that everyone was happy with the level of transparency in the market.

Speaking further, he assured that with the recession now over and foreign reserves now standing at $42 billion, the CBN had enough in its arsenal to maintain the international value of the Naira as well as guarantee access to foreign exchange by those requiring it to meet genuine needs.

He also reiterated that the desire of the Bank to ensure that all, particularly low end users, had access to foreign exchange to meet genuine needs prompted the Bankers Committee, in its first meeting of 2018, to agree to sell United States dollars to those requiring it for invisibles at the rate of N360/$1, without any commission whatsoever. It will be recalled that the CBN in its last SMIS, in January 2018, injected the sum of $304.4 million in the inter-bank Foreign Exchange Market.

The apex bank in its economic report for fourth quarter of 2017, explained that foreign exchange inflow into the economy increased in the fourth quarter of 2017, as a result of the rise in international spot price of Nigeria’s reference crude oil, the Bonny Light to an average of $62.48 per barrel in the fourth quarter of 2017.

The report obtained by Nigerian NewsDirect stated that, “The rise in crude oil price was attributed to the decline in United States shale oil output, increased global demand for refined petroleum and extension of the Organisation of Petroleum Exporting Countries (OPEC) production-cut deal to the end of 2018. In addition, an overall balance of payments surplus of 2.2 per cent of the gross domestic product (GDP) was recorded in the review quarter.

“Consequently, foreign exchange inflow through the CBN stood at $14.71 billion, showing an increase of 22.7 per cent and 118.7 per cent over the levels in the preceding quarter and the corresponding period of 2016, respectively. The increase reflected the rise in receipts from oil and improvement in non-oil proceeds.”